we when first we practice to deceive said sir walter scott about the global derivative markets natch or at least he could have the deception at the heart of the derivatives market is of course that risk can be separated from reward and once removed this risk then be disappeared like so many bearded men and little children in the war on terror who've gone. disappear go poof gone disappeared. but the first law of thermo derivatives says that risk can only be managed never destroyed and so because of this practice to deceive we have a wicked web of libel rigging price fixing gold suppressing central bankers atop a pyramid of algo grifting client account stealing risk shifting banking scoundrels who have caused the global financial meltdown stacey max kaiser

yes we are all trapped in this we could web and you can see that in places like ireland where we were stuck in this web of deceit that they've created of all these derivatives and projects and debts that nobody can move without getting stuck further into this web of deception but when these deceivers get caught one of the things in a classic con is to try to blame the victim so let's look at some of these headlines regarding these deceivers and now that they've been caught s m p lawsuit portrays c.d.o. sellers as duped victims oh the poor suckers at citi group and bank of america fooled about the stench of their own garbage by those sneaky credit readers at standards and poor's so the u.s. department of justice as we know has filed a civil suit against senator port the rating agency saying that they fraud gently raided these collateralized debt obligations. some of the subprime mortgage

packages and the u.s. justice department made some peculiar allegations in this lawsuit this week against s. and p. and its parent mcgraw hill according to the government citi group was defrauded by s. and p. credit ratings on sub prime mortgage bonds that citi group itself created and sold bank of america to allegedly was defrauded by s. and p. in the same way if you look at a mafia movie the witnesses get whacked so the rating agencies were paid to give bogus ratings this was a story six months ago moody's s. and p. fitch all took money under the table in bribes to give faulty or dishonest ratings they rated toxic securities that were in the paper they were printed on aaa rating they were worthless they're all witness to the fraud so now citibank is going to try to whack him moody's which is as it is a big position moody's by warren buffett so he may have to a let one of us captains moody's get whacked because they're

a witness to the crime so as the gets different more and more difficult to. to repeat the same con. the money is tight even in the professional circles of larceny that is wall street so now there are more in about the about the whacking business however in this case s. and p. decided not to settle with the department of justice they actually want to go to trial because they reckon this is so absurd is beyond absurd that even the normal person out there is going to see how absurd this is it's so high hard to hide the absurdity of something is going to end up in the witness protection program for. rating agencies because they get whacked i'll make that prediction right now i mean one of those guys will be disappeared as we alluded to in the introduction people are being disappear into like jimmy hoffa i mean whoever runs s. and p.

now is going to go the way of jimmy hoffa he's just going to be in a cement shoes somewhere at the bottom of the river people say whatever up another guy i don't know i guess he's got a vacation. j the department of justice is suing the s.n.p. under a one thousand nine hundred nine statute that covers frauds against federally insured financial institutions so there are about twenty four collateralized debt obligations issued in two thousand and seven in particular that they're suing them for under the government's theory citigroup and bank of america paid s. and p. for ratings that convinced the banks their own c.d.o. awful was rock solid and because s. and p. deceived them into thinking the best of their own rubbish these banks and other lenders suffered more than five billion dollars of investment losses according to the suit while the banks didn't lose a penny they they apply for bailouts and got bailed out the taxpayer through austerity or inflation is suffering and i think that in the

case of these rating agencies who are packaging fraudulent securities i mean look what happening in greece for example the rating agencies plus citibank plus goldman sachs plus lloyd blankfein member there and grace they gave to play rating to toxic securities that they knew would blow up knew that the country would blow up then they're in there with privatizations games they're taking over assets for pennies on the dollar as part of a leveraged buyout of a country called greece. and so now as i said there witnesses are coming forward and they're saying wait a minute now that people are on the streets with torches and pitchforks and looking for their pound of flesh we want to point the finger at citibank and so the bank is saying wait a minute we need the government now the department of justice under holder who's he's a hit man he's going to whack him one way or another of course bank of america and citi group have a long history that one could see that they are very innocent these two banks in particular would have no understanding of the fraud they themselves were purport to

look up argentina you know back in the eighty's and ninety's they had the government nationalized citibank private debts and then see forced to the people to suffer through austerity and so citibank is a serial. financial. high jinx or you know i'll going to avoid the t word for today just just for variety i mean if i thought the t. word is being prosecuted in this country or america i would mention if i thought it or drone sent up the strength training jenkins over at barclays bank and exploded in this intestines and splattered on the wall i thought that would have any effect if i thought the government would give a flying hoot about their own population i would mention the to a word but i don't because they don't well let's talk about the u.k. because of course this week we've also seen r.b.s. fined six hundred fifteen million dollars most of that is going to the c f.t.c. in the u.s. department of justice and a little bit to the f.s.a. here but here's

a headline regarding this max maybe miss to blame for libel or fixing i've never seen this but i'm pretty sure i know what you're going to say that their mates on the phone and they're just swapping gossip and they happen to slip into their gossip oh would you mind reading the life is that what's going to be the story's going to be close so following this fine stephen hester the c.e.o. of r.b.s. the taxpayer owned or. yes was asked is there a risk of a cartel between investment banks to deliberately fix the library has to reckons that the problem is that more a junior level there was a meeting in a city bar is kind of thing going back to the big bang so he's saying in the beginning there was nothing and then maggie said let there be fraud yes in the beginning there was stephen hester and on the day he committed massive fraud in the library scandal and he's blaming his mates he's blaming oh it's meeting this well

i'd like to see him use that defense well you know it in a situation where the crimes are a bit more obvious you know people don't understand that when the stephen hester commits fraud f r a you day in case you're wondering how to spell that word stephen hester committed fraud serial fraud serial fraud to measure. when you commit fraud . people don't understand that it has consequences. and so stephen hester's defense that well a bunch of my mates were arguing for gay rights down in what starts out our director lives in brighton well you know we didn't take on board the fact that we were committing massive acts of financial fraud because we were touching each other we were naked we were in a hot tub. and one for my mansion the hot tub naked i was touching his bomb and i said hey buddy i'm stephen hester well you're a lot more for me and he sort of understood that i love you and they committed this

massive fraud statement after saying you know we're mitch we know we're we want rights for for fraudulent market riggers and cameron saying i've got the entire backbenchers behind me they're trying to blame this libel rigging on a few bad apples and that these few bad apples did it for personal gain i was not an institutional crime the institutions themselves were not involved in this and they said they found no evidence that this went up to the senior levels of management and they are and they also found from the emails that the libel raking did not stop until november two thousand and ten at r.b.s. two years after the taxpayer owned it so the taxpayer itself is complicit in these crimes by the way that makes them but he's saying that it's so it's not an institutional systemic fraud and it's not a conspiracy and it's not a cartel the classic ingredients of a rico lawsuit and yet even on september nineteenth two thousand and eight you see an email going back and forth from enter dealer broker b.

he writes to yen trader one can you do me a favor you're not going to get paid any bro for this and we'll send you lunch around for the whole desk can you flat can you switch to your semi at five in three quarters one hundred yards meaning one hundred billion between u.b.s. just get take it from u.b.s. give it back to you b.s. he was a pace and bro we won't bro you noticed all erotic language of the r.b.s. traders there in the hot tub a fraud and a touching each other bum and. saying wait a minute don't tell my wife don't tell my wife that i'm in the hot tub committing fraud massively stephen hester is right here giving us all nice all of oil rub down thank you stephen hester put it back in your pants and try to act like you're not a complete fraudulent hoaxed or so another journalist asked why they are serving no time why they're not being arrested because if you rig a sports match for example you would do time you would be arrested and thrown in jail when fourteen year old boys join in on a nationwide riot and steal

a bottle water member david cameron said if you're old enough to do the crime you're old enough to do the talkin they can't take the defense that they were just mates there maybe where maybe well that we tortured to the corner store and we stole of budda lucas say and then we set the guy on fire. because we were being made i mean why can't they just say that's right they're not white yes now r.b.s. not keen on blood on the market for the sake of it this might be the takeaway quote from the r.b.s. board sir philip hampton says that he hasn't seen the need for multiple casualties or near the top of the bank for the sake of blood on the carpet him explaining why they didn't need any arrests or that they didn't need other than these twenty one bad apples that they identify junior level bad apples resident apples and the h.s.b.c. money john money cartel banks scandal they barclays libel or rigging the. other

two major banks involved and i genie of the mist selling scandal the the credit default scandal every sort of orders for major banks in the u.k. the entire board of all these banks are are complicit to fraud f r u d they're complicit in fraud go over here tell me you're not fraud but you won't because you're busy in the heart of touching each other but i'm coming down here for your fraud that's unconscionable. thank you thank so much report thank you. say to the second half speaking to. planet ponce. government no longer represents the. people who are going to take the term.

the way our economic system currently. download the official publication so choose your language stream quality and enjoy your favorite. if you're away from your television just doesn't fly with your

mobile device so you can watch on t.v. any time anyway. in the welcome back to the kaiser report i'm max kaiser time now to go to misfire stein author of planet ponzi which i'm holding here right now this is the book that explained this is the the result of stone of the entire global scam mitch welcome back to the kaiser report thanks for having me here all right mitch firestone you

have some props some lovely props i like what i see tell me what does all this well max i think that what we need to do is explain to everyone the scope scale and magnitude of what a trillion dollars or three trillion dollars actually means this is a u.s. hundred dollar bill hundred dollar bill. this is my briefcase if you take this briefcase a million dollars is a lot of money to me you can fill it up with hundred dollar bills and it would be a million dollars ok i got it so this is the roughly the size of one hundred a million dollars in hundred dollar bills correct now the fed's balance sheet which is over three trillion dollars that would be in hundred dollar bills if you were to stack them up it would be ten thousand times taller than or actually eleven thousand times taller than the empire state building that's pretty high three point seven million meters tall ok so it's vast one point four trillion is the entire amount of money the monetary gold in the world now not before this crisis started

they had roughly eight hundred billion on their balance sheet now it's over three trillion that's right and during the crisis as part of the deal with the crisis they swap toxic assets with the banking community for fresh treasury bills and they keep those toxic assets on their books with the idea that at some point you get a fake it's a make it at some point growth will happen and then they can unwind that balance sheet but gross not happening the problem is there's a blame game going on the favorite game is three three different elements of it divert and deflect do delay and pray and extend and pretend that's the bag of tricks that they have unfortunately you reach a brick wall at some point and the effectiveness of q.e. starts diminishing each time you do it right because going back to you know if you go back twenty thirty years there was the idea was you can float debt the debt creates growth in the growth as long as the g.d.p. is rising faster than the rate or percentage that your debt is growing your net net you have a growing economy but starting

a year ago or so no matter how much they inject in the economy there doesn't seem to be any growth so instead of changing course instead of saying you know maybe the strategy needs to be reworked maybe we take another direction they're doubling down they're just they seem to be you know the very definition of insanity they're just doing more and more of it and as a result this is leading to real. well inflation that you really see in stuff i see you've got some silver this is the kaiser ethical silver around us you have a gold krugerrand what you hold onto and just for safekeeping safety safety that's explained that a year ago the cool the safety it's safe it's safe now it's never been safer so so what does what it why did you bring these today well i think that what's going on is asset bubbles are being inflated by the central banks around the world by starting a current japan starting a currency war i don't know how many people realize that but when you inflate asset bubbles to create phantom collateral to support debt based aggregate demand which is what the central banks are screaming about keynesian theory let's create

aggregate demand what's going to happen is the debt based aggregate demand that they're creating with phantom collateral. that's going to evaporate and implode when the stock markets ultimately collapse because they're not based upon reality ok let's on printing and then the debt is going to remain and what's going to happen i mean pensions are evaporating the pensions people are screaming in england because of what's happened with the pensions and it's a good thing that the m.p.c. has nine members who can vote against more monetary stimulus and against more unlimited money printing i mean bringing somebody in to print money is a dangerous game all right so two points terry mentioned pension holders in the u.k. suffering and the bank of england put out a study that said for every pound that is being saved on mortgages let's say with lower interest rates they're losing two pounds and savings and pension accounts and in the insurance industry so that if there again you have the arithmetic of losing now you also mention this idea of collateral collateral value so we know that in

the global system of banking it works on fractional reserve where banks hold maybe ten percent of the loans that they make but over the past ten years mitch correct me if i'm wrong they assimilation of these trillions and trillions of dollars of bad debt means that they're not really holding time percent and i'm really holding one percent in the case of the federal reserve bank you know they're there what's the storm of the core money that the base money the base money is relative to the debts they're less than two percent now correct leverage in europe has not changed leverage is getting bigger in the us too big to fail has gotten bigger now there's a couple things we want to talk about here numbers never lie but people bankers and politicians do so you can manipulate numbers to say anything and inflation is a good example of that oil prices for example i brought another prop along though if we take a look at this. oil prices since two thousand and eleven as you can see are up thirty six percent yet the official inflation numbers as the government would like you to believe they claim are benign and ben bernanke says they're controlled

similar to when he said in two thousand and eight or nine that sub prime housing crisis was contained what you also don't see in many places when people talk about buying equities and equities are undervalued if equities were really and truly undervalued you'd see a lot more merger and acquisition activity which you're not really seeing but gold in the past ten years as you can see from this chart is up over five hundred percent and the equities returns have been flat or or or minimal well you know this all sounds all very fascinating and we know the risks we've covered the risks and it people say well one's going to explode i think we already are seeing it exploding and something called the currency wars but what i mean kapan is one of the crucial players in this their currency against the euro and against the u.s. dollar and the pound if you look at it there's been a gigantic move in the past six months i think twenty six percent the euro has moved against the yen that's currency devaluation currency debasement it's

a devaluation and sixteen percent against sterling and sixteen percent against the u.s. dollar. now the euro this is a hundred euro two hundred euro note if you notice i can't even tell it looks like play money they've got a bunch of arcs on here and some bridges do you know where the bridge goes or where this bridge is that would be the point nuffin in paris connect over the sand this is where i first met stacy herbert well no it's actually the bridge to nowhere because they couldn't agree upon what what countries bridges to put on here so they made it up it's imaginary like the value of this currency is appreciating on nothing just on air so it tells you what a bad state the economy's must be in you know spain is ready to implode you can't believe anything that the leaders of spain said you know there's a corruption charge going on there and quite frankly they have they've had negative g.d.p. negative income from tax revenues twenty six percent unemployment sixty percent

youth unemployment and people are buying those bonds that's only the banks that have taken money from the l.t.r. o. are investing in those bonds those bonds are way overvalued in my view ok that gets back to the plan a ponzi because this is a lottery ticket and plan a ponzi correct basically so it's a worthless piece of paper with worthless monuments that has a little hologram in one corner that is backed up by the value of the european central bank but their pay and central bank itself is imploding in terms of its let's say base money to debt ratio is imploding it's exact it's expanding alarmingly at an alarmingly fast rate that they they're not growing there's no savings it's become a whole gram well there's been no deal leveraging in europe yet none of the banks of the lever and that's a massive problem because you don't know what kind of toxic assets are on the books of the banks i mean look at m.p.'s and m.p.'s scandal all the emails disappeared are you shocked i mean mario draggy was the head of the bank of italy at the time

and all these e-mails have disappeared there's an investigation great mortgage backed security so he went down i have read all right that's that's it. right but you know that's monte de passé ok we've got a minute or so left but i just want to talk about a key strategy here to the exit strategy the unwinding strategy because they got all these banks they got all this incredible killings of dollars of bad debt they say bernanke you said well we can start on whining in fifteen minutes no problem that's what they say but of course once they do start to unwind there's an actual bid for these things that they're trying to get rid of then the rest the market knows that the it's not going to be supported by the central banks anymore they're going to sell so they're going to be selling against anyone else selling at the same time so you can have a huge crash and they and they therefore a lot of people are saying there is no exit strategy this will never and what we're heading for mitch curious what you think about this would be a global reset. like we had a brain was after world war two that won't work i think that you'll have to have sovereign failures and what's happening your engine can your thinking pretty

there'd be others want to get a first one and that would be hyperinflation you know i think i don't know it's going to hyperinflation but you're going to have east if you debase the currency by thirty percent that's exactly what you're going to get there is no exit strategy there are no buyers for the massive amounts of so good global ponzi scheme they music stops and somebody doesn't have a chair and that's somebody you're thinking as japan well the first one might be japan but the united states has to get its way out of debt they can't kick it down the road any further which is what they're doing that's a strategy that doesn't work hope is never a trading strategy ok yeah that doesn't work i mean you know how you can remain alter the longer the markets remain irrational that's exactly right you know lie board library scandal was the tip of the iceberg as you know there's a lot more out there but lack of enforcement as usual is the problem they have the tools to do it they've chosen not to do it look at m.f. global what happened to that i mean one point two zero and let's end on course i disappeared off into the sunset so you know i don't think so and yet so what do you

think about this idea that the banks are now saying that they're victims that they were involved in these toxic c.d.s. because the rating agencies gave them high ratings it's kind of a ridiculous argument but you know i think that that argument s. and p. they're going after s. and p. and if one was guilty they're all guilty you know i think that the banks could have been unwound like the savings and loans in america and the resolution trust corporation that was the depository for all the bad stuff during the savings and loan crisis in america that is what now people call it bad bank correct correct well i think on the bad bank it is a bad bank right so they took all that junk they put it into a bad bank they essentially planted the deposits they got new management and they brought about competition got rid of the bad guys brought about competition and they tried to work out of the bad debt over twenty thirty years. as the market hopefully improve to kind of leak it out leach it out and you can get rid of it over time but the idea of creating a bad bank now it's in

a six hundred trillion dollar global derivatives market and it is like you need a bad planet i think this is another planet he's a bad bet when it ponzi but i think that your six hundred trillion in derivatives is an understatement if you look at the controller of the currencies website it's exponential the amount that they're admitting to on balance sheet so you know that it's probably much larger it's a much larger number as always when they report losses like the whale went from two to six to whatever right. it's bigger than six hundred trillion i'm telling you need a bad planet that's exactly what it to store like sequester the bad pet ponzi is the way out planet x. their way it's the way out you're going to monetize plan a ponzi this is going to be the new collateral the holding the global central bank they could you can float a one trillion new credit default swaps using this is collateral because all the c.d.o. yellows and see all these products have come back and leverage has gotten bigger there were no lessons learned by too big to fail the regulators have lost even more

to keith that there is no guard dog the guard dog has no teeth but a reasonable bark on television that's all the time we have it goes by so fast we'll have to have you on again soon but thanks for being on the kaiser report max i appreciate it was great thanks for having me ira and that's going to do it for this edition of the kaiser report with me max kaiser and stacy herbert our thank my guests misfires stein author of this classic instant classic plot of poncy if you'd like to contact us please tweet us at kaiser report or at facebook dot com for which last kaiser report and so next time ask either saying bio. speak your language. program some documentaries in arabic in school here on. the teams in the world talks.